252 Pa. 425 | Pa. | 1916
Opinion by
This is the second time this case has been before us. The earlier appeal is to be found in 241 Pa. 444. The origin and history of the contention between the parties are there so fully stated that it will be necessary here to recite only such facts as bear directly upon the point now in issue. The appellant, the Hamilton Trust Company, being largely interested in the completion of a building contract entered into by C. F. McFadden, and which contemplated the improvement of a vacant lot of ground in the City of Philadelphia by the erection of twelve dwellings thereon, executed and delivered to the Standard Tile Company, as an inducement to said company to engage with McFadden to supply all the material and labor necessary to do the tile work in the twelve houses, at the price bid by the company, the following declaration in writing:
“Philadelphia, March 2, 1907.
“Standard Tile Company,
“Land Title Building, Phila., Pa.
“Gentlemen: W. Sherwood Crowl, of the City of Philadelphia holds title to premises 4520 Walnut street, Philadelphia, and C. F. McFadden has arranged with him that this property shall be security for indebtedness to be incurred by C. F. McFadden, because of the work and materials estimated for by you and accepted by Mr. McFadden. This company will see that this property is made available to you, by payment of your bill out of these proceeds on sale, by conveyance to you, or else by a mortgage in the amount of your bill against Mr. McFadden, if the latter should fail to pay your bill. The
(Signed) “Hamilton Trust Company.”
On the faith of this security the tile company contracted with McFadden. The premises 4520 Walnut street was one of the subdivisions of the lot that was being improved. Like each of the other eleven it was subject to a mortgage of $8,000.00, held by the appellant company, and in common with all the other eleven was subjected to a general mortgage of $15,000.00, also held by the appellant company. On the faith of this security from the appellant company the tile company entered upon the work. McFadden, after he had completed the construction of six of the houses, failed. The tile company had fulfilled its contract as to these six houses, and had furnished considerable material to be used in the uncompleted buildings. There was then due it from McFadden the sum of $2,792.67. The lot 4520 Walnut street that was to be made available to the tile company as security for its claim remained at this time unimproved, or at most improved but slightly. Later, but not by McFadden, it too was built upon. McFadden having defaulted in payment of the tile company’s claim, the latter in August, 1908, made demand in writing on the trust company that it comply with one or other of the alternative stipulations contained in the declaration above recited, inasmuch as McFadden had failed to pay. To this demand the trust company replied that it had been advised by McFadden that the claim of the tile company was contested, and not to transfer or mortgage the property therefor. Following this refusal of the trust company the tile company brought the present action to recover damages. Meanwhile the trust company had foreclosed on its second mortgage and sold the premises at sheriff sale for the sum of $100.00, subject to the $8,000.00 mortgage. These